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30 September 2019

30/09/2019

Market Data and Morning Chat

Morning Chat

Was that a tough week: If you were Donald Trump – now facing impeachment proceedings – or Boris Johnson with various troubles of his own, last week was not one to repeat.  Political shocks certainly put the dampeners on last week’s equity markets, well, that and the oil price swing and some weak earnings reports.  US markets were down ½ to 2% over the last five days, while European markets – save the UK – slipped about ¾% and Asian markets fell 1 to 2½%.  The UK? Equities were up, surprisingly, ¾ to 1¼%, likely boosted by the weakening of sterling improving international competitiveness.

Anything to boost next week? Can you believe it, September closes out today.  Based on current numbers – and despite last week’s slip – September should see gains for equities, but not so much for bonds.  As to October, we’re looking to Friday’s US non-farm payrolls rising 162,000 alongside positive gains in construction spending & factory orders and the ISM version of the manufacturing PMI rolling in over 50 to help.  Plus UK final Q2 GDP is also published this week – maybe it won’t be negative. Meanwhile, today, Germany’s retail sales numbers recovered from last month’s decline in line with forecasters estimates.

…And for some stock-specific news: Friday also saw big swings in individual stock names. In the UK, improved mortgage approvals helped build up Persimmon (+5.2%) while an analyst upgrade on Marks & Spencer (+4.3%) made the shares more fashionable. Kingfisher (+3.6%) and Smurfit (+3.6%) also saw good gains. Over in the US, a new CEO let Wells Fargo bank a decent 3.9% gain.  All good news.  Unfortunately, Micron technologies (-11.1%) had disappointing things to say on their Chinese sales which were chipped away at thanks to the trade war. Their comments also hit Lam Research (-5.3%) and Applied Materials (-5.2%).

There were reports Friday that the Trump administration could delist Chinese stocks in the US
… which hasn’t helped Japanese and European equity futures much today over trade concerns
Italy’s economy minister suggests a 2.2% budget deficit which should annoy Brussels

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -3.74 (-0.29%) at 1,272 (YTD: 17.40%; 5YR: 50.9%)
MSCI AC World Equities (USD) down -24.07 (-0.26%) at 9,163 (YTD: 17.90%; 5YR: 45.2%)
Barclays Global Aggregate Bonds down -0.18 (-0.04%) at 510 (YTD: 6.43%; 5YR: 10.5%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -15.83 (-0.53%) at 2,962 (YTD: 18.15%; 5YR: 50.2%)    
NASDAQ down -91.03 (-1.13%) at 7,940 (YTD: 19.66%; 5YR: 76.7%)    
Euro STOXX 50 up +13.70 (+0.39%) at 3,546 (YTD: 18.14%; 5YR: 9.9%)    
FTSE 100 up +75.13 (+1.02%) at 7,426 (YTD: 10.38%; 5YR: 12.1%)    
CAC up +20.01 (+0.36%) at 5,641 (YTD: 19.23%; 5YR: 27.7%)    
DAX up +92.40 (+0.75%) at 12,381 (YTD: 17.26%; 5YR: 30.7%)    
Nikkei 225  down -123.06 (-0.56%) at 21,756 (YTD: 8.70%; 5YR: 34.5%)    
Hang Seng up +134.19 (+0.52%) at 26,089 (YTD: 0.94%; 5YR: 13.8%)    
MSCI Emerging Markets down -7.80 (-0.77%) at 1,001 (YTD: 3.70%; 5YR: -0.4%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.64 (began the year at 2.49; 5 years ago it was 0.57)    
US 10 Year up +0.02 at 1.70 (began the year at 2.68; 5 years ago it was 2.49)    
UK 10 Year down -0.02 at 0.50 (began the year at 1.28; 5 years ago it was 2.43)    
Germany 10 Year up +0.02 at -0.56 (began the year at 0.24; 5 years ago it was 0.95)    
France 10 Year up +0.02 at -0.26 (began the year at 0.70; 5 years ago it was 1.28)    
Italy 10 Year up +0.03 at 0.85 (began the year at 2.74; 5 years ago it was 2.33)    
Japan 10 Year up +0.02 at -0.22 (began the year at -0.01; 5 years ago it was 0.53)    
Barclays EM Basket down -0.02 at 5.49 (began the year at 6.22; 5 years ago it was 5.43)
    
Selected Currencies    
$ strengthened +0.0010 versus € (+0.09%) at 1.0934 ($: YTD: 4.52%; 5YR: 13.4%)    
€ strengthened +0.0005 versus £ (-0.04%) at 1.1244 (€: YTD: -1.01%; 5YR: 14.2%)    
$ strengthened +0.0018 versus £ (+0.15%) at 1.2293 ($: YTD: 3.55%; 5YR: 24.2%)    
¥ unchanged 0.0000 versus $ (0.00%) at 107.8600 (¥: YTD: -1.67%; 5YR: 1.7%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.03 (-0.05%) at 61.62 (YTD: 15.89%; 5YR: -33.9%)    
WTI Crude ($/bbl) down -0.50 (-0.89%) at 55.91 (YTD: 23.12%; 5YR: -40.2%)    
Gold ($/ozt) down -8.05 (-0.54%) at 1489.00 (YTD: 16.11%; 5YR: 23.2%)    
Copper ($/mt) up +45.00 (+0.79%) at 5767.00 (YTD: -3.32%; 5YR: -14.2%)    
    
Data sourced from Bloomberg as of the close of last trading day.    
YTD = Year-to-date return; 5YR = five year return    

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros